Licensed confectionery manufacturer Bon Bon Buddies has agreed a rescue plan with creditors after a “sustained decline in support from retailers” and Brexit-related cost increases resulted in mounting debts.
The struggling Welsh sweet maker confirmed a Company Voluntary Arrangement with creditors last month to ease debt repayment as part of a turnaround plan. It has hired insolvency specialists KSA Group.
“The fall of the pound after the Brexit vote saw our costs rise by 22% overnight, while changes in the retail sector have led to the most challenging trading conditions in our 25-year history,” said chairman Chris Howarth.
“This has been compounded by a sustained decline in support for licensed character confectionery from UK and European retailers.
“These conditions led the board to carrying out a complete restructure of the business and our creditors agreeing to a CVA, which has resulted in the business executing a turnaround plan.”
The CVA deal was approved by 95% of company creditors, including largest licensee The Walt Disney Company.
The manufacturer produces and distributes a mixture of licensed character and own-brand confectionery products.
Established in 1993, it has grown to supply more than 40 countries worldwide, with eight European sales and logistics facilities and further global distribution.
Bon Bon Buddies slumped to a £47k pre-tax loss in the year ended April 2017, down from a £2m profit the previous year. The supplier saw sales slip 8% to £40.8m.